DEVELOPMENT PROPERTY Somerset Liang Court Property Singapore was formerly a 197-unit leasehold serviced residence in Clarke Quay under a management contract before part of its GFA was divested in July 2020. The retained GFA of about 13,000 square metres is currently under redevelopment into a 192-unit serviced residence with hotel licence and a refreshed lease of 99 years. CLAS owns a 100% interest in the property. Site works commenced in mid-July 2021 and foundation piling works were completed in 2022. Substructure works are ongoing and targeted to be completed in 2024. The new property, which will be part of an iconic waterfront integrated development, is on track to be completed in 2H 2025. 2023 REVIEW In 2023, the Singapore economy grew by 1.1%, moderating from the 3.8% growth in 2022, due to contraction of the manufacturing sector and slower expansion of services-producing industries3. Headline inflation eased to 4.8%, as compared to 6.1% in 2022. Singapore’s tourism sector recovered strongly with 13.6 million international visitor arrivals in 2023, a 115% growth YoY to 71% of pre-pandemic levels in 2019. The increase was led by Indonesia, followed by China and Malaysia. Tourism receipts were estimated to reach S$24.5 billion to S$26.0 billion, about 88% to 94% of 2019 levels. Apart from a robust leisure and sporting events calendar in 2023, new business events which were hosted in Singapore also drove the recovery4. While international visitor arrivals were higher on a full-year basis, growth began to normalise in the last quarter of 20234. At Singapore’s Changi Airport, the rate of growth in passenger traffic was also observed to moderate, given intensifying competition in the region. Singapore had an early head start as one of the first in Asia to reopen to international travellers, and other countries were catching up5. Singapore’s hotel sector RevPAR grew about 20% YoY in 2023, reaching 118% of 2019 levels on a full year basis, but declined about 9% YoY in the last quarter of 2023. ADR for the sector was 12% higher YoY in 2023, at 128% of pre-pandemic levels, while occupancy came in at 80%, below the occupancy of 87% recorded in 20194. Reflective of the market trend, the performance of CLAS’ properties surpassed pre-COVID-19 levels in FY 2023. Demand from both the corporate and leisure segments, as well as the uplift from MICE events, enabled the properties to command high room rates during the year. For FY 2023, the RevPAU of CLAS’ properties under management contracts and MCMGI increased 61% YoY to S$172 despite the renovation at TRH and relatively softer demand in 4Q 2023. Excluding TRH, RevPAU increased 88% YoY in FY 2023. On a same-store basis6, the RevPAU of Citadines Mount Sophia Property Singapore in 4Q 2023 was 5% higher than 4Q 2019. 2024 OUTLOOK Singapore’s GDP is forecasted to grow by 1% to 3% in 2024. Amid tight financial conditions and geopolitical uncertainty, economic activity in outward-oriented sectors is projected to remain subdued in the first half of the year, before recovering gradually in tandem with an expected easing of monetary policy as inflationary pressures recede3. The continued recovery in air travel and tourism demand is expected to support growth in Singapore’s tourism and aviation-related sectors, albeit at a moderated pace from that in 20233. The Singapore Tourism Board expects the recovery of the tourism sector in 2024 to be largely driven by improved global flight connectivity and capacity as well as the implementation of the mutual 30-day visa-free travel between China and Singapore. A vibrant lineup of events in 2024, including concerts by popular artistes, are expected to further boost demand and activity levels. International visitor arrivals are forecasted to reach around 15 million to 16 million, bringing in approximately S$26.0 billion to S$27.5 billion in tourism receipts4. Nonetheless, these forecasts remain below 2019 pre-pandemic levels. The outlook for CLAS’ Singapore properties is expected to trend in line with the market. As pent-up demand eases, RevPAU growth is expected to be driven by occupancies as opposed to room rates. With the full inventory of rooms at TRH available for sale post-renovation, the property is expected to contribute positively to CLAS’ performance in FY 2024. In February 2024, CLAS entered into an agreement to divest Citadines Mount Sophia Property Singapore. The divestment was completed in March 2024. Post-divestment, CLAS now has four properties in Singapore. 3 Source: Ministry of Trade and Industry (2024) 4 Source: Singapore Tourism Board (2024) 5 Source: The Straits Times (2024) 6 Excluding Somerset Liang Court Property Singapore which was divested in July 2020. ANNUAL REPORT 2023 41 Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information
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